Small agencies need to stop thinking small

There is a growing trend in the advertising industry. Smaller, independent agencies are increasingly attracting senior talent from established network agencies. Creative Directors, Chief Creative Officers and senior business leaders are making the move, often accompanied by proud announcements from their new employers about the impressive talent they have managed to attract.

For the small agency, it is something of a coup. It has acquired experience, pedigree, credibility and, hopefully, the ability to attract bigger clients.

But I have a prediction whenever I see some of these announcements. In six months to a year, another announcement will follow. This time, it will be about the executive's departure.

I have actually taken bets on this, and my track record has been rather good!

Why does this happen? I believe the overwhelming reason is culture.

Large network agencies and small entrepreneurial agencies operate on fundamentally different philosophies.

The large network agency, despite all its bureaucracy and corporate excesses, generally hires senior professionals because it expects them to exercise judgement, take decisions and lead teams. There is a certain degree of professional autonomy that comes with seniority.

Small agencies, on the other hand, are often built by entrepreneurs who may have come from the creative or account management side of the business. They have built their organisations through personal sacrifice, financial discipline and an extraordinary degree of personal involvement. They know every rupee that goes into the business. They are used to making every decision themselves.

And therein lies the problem.

Consider some seemingly mundane examples.

A travel desk is instructed to buy the cheapest airline ticket, not necessarily the most convenient or sensible one. On occasion, this could mean a woman employee arriving in a city late at night simply because that was the cheapest flight available. A dinner bill of Rs 3,000 for a team working late becomes the subject of prolonged scrutiny.

Senior executives who have spent decades in professional environments suddenly find themselves expected to record attendance through thumbprint biometric systems, almost as though they were factory workers.

Decisions, sometimes even relatively insignificant ones, have to be referred to the agency head or a young CEO who has grown with the organisation from its inception.

Individually, these may seem like minor irritants. Collectively, they become a statement about the culture of the organisation.

The senior executive begins to wonder: Was I hired for my experience or merely for the designation I bring? Am I expected to contribute to the organisation's future or simply follow the founder's instructions?

Initially, the excitement of a new opportunity, the prospect of building something and perhaps a more attractive compensation package can overcome these differences. But eventually, the cultural incompatibility begins to take its toll.

The executive moves on.

The agency then starts looking for another senior professional, perhaps from another network agency, and the cycle repeats itself.

Of course, not every small agency operates this way, just as not every network agency offers a progressive working environment. There are independent agencies with wonderful cultures and network agencies that have lost their way.

But there is a larger lesson here for entrepreneurial agencies.

If you want to attract big-agency talent, you must be prepared to offer a big-agency environment.

And I don't mean bigger offices, more expensive furniture or lavish entertainment budgets.

I mean thinking big.

Think big about the people you hire. Trust their experience. Give them the authority to make decisions. Respect their professional judgement. Invest in their comfort and wellbeing. Understand that a little money saved on an employee's travel or working conditions could cost you considerably more in lost talent.

Financial prudence is important. But frugality should never become an organisational obsession. There is a difference between controlling costs and demonstrating a lack of trust.

Most importantly, entrepreneurs must recognise that the organisation cannot remain an extension of their own personality forever. What works when an agency has 20 people may not work when it has 200.

The founder has to evolve from being the person who makes every decision to the person who builds an organisation capable of making good decisions.

This is particularly important at a time when the traditional agency networks are undergoing consolidation, mergers and acquisitions. Many once-distinctive agencies have lost some of their original personality in the process. This presents independent agencies with an enormous opportunity to attract both talent and clients.

But they must understand that being small is not necessarily a disadvantage. Thinking small is.

The future may well belong to independent agencies. But to claim that future, they will have to grow beyond the limitations of their founders.

After all, you cannot build a big agency with a small mindset.